The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
Economic data was mixed – the ADP non-farm payrolls reading came in at 213,000, beating expectations of 207,000 and confirming that the economy is strong on that front. This is a good start heading into Friday’s official payrolls data. However, manufacturing data tapered off a bit, which was a bit of a disappointment. On top of all this, there is another Ebola scare and some felt this had a play on the USD. The overnight weakness in the greenback saw the recent trends in major currency pairs stall temporarily.
After being sharply sold off on the back of retail sales yesterday, AUD/USD managed to reclaim the $0.8700 handle. I feel this is more a symptom of temporary USD weakness as bonds rallied and yields fell, and it’ll only provide more opportunities to get short.
The $0.8660 (January lows) level managed to hold, although I feel a retest could be on the way in the near term. On the calendar today, we have building approvals and trade balance data due out at 11.30am AEST. This is likely to cause some volatility for the pair and I would look to sell any rallies into the $0.8800 region.